Michael Taube: Airlines Need an Open Skies Policy, Not a New Bill of Passenger Rights

An Air Canada aircraft is parked at a gate at Vancouver International Airport in Richmond, B.C., on Dec. 26, 2022. (The Canadian Press/Darryl Dyck)

Commentary

Canada’s airline industry has struggled mightily in recent years. COVID-19’s disastrous economic effects led to a massive reduction of passengers and travel. Lost revenue forced a desperate Air Canada to negotiate a deal with Ottawa in April 2021 to receive up to $5.9 billion through the Large Employer Emergency Financing Facility. Airlines reduced their fleets and laid off staff to cut costs, too.

Even as things have started to return to normal, problems persist. This includes hours-long lineups at Canadian airports, droves of flight delays and cancellations, and tales of lost luggage.

What’s a possible solution to this crisis? A revamped airline passenger bill of rights, of course!

Excuse me?

That’s where the federal government will apparently be focusing their attention. Transport Minister Omar Alghabra told reporters on Jan. 24 that “customers need to be protected during this period” and to “stay tuned—you‘ll see action, you’ll see new tools introduced. Mark my words. I feel the frustrations of Canadians. I heard them.” This could reportedly lead to a review of regulations used in the European Union. Airlines in this jurisdiction are responsible for delays and cancellations instead of passengers, other than in extreme circumstances like a volcanic eruption or act of terrorism.

Alghabra also took some digs at Pierre Poilievre. He said the Conservative leader has “a unique style of making videos and inflaming people’s emotions without offering any solutions.” Moreover, he believes “Canadians don’t want to see angry politicians, they want to see politicians take action.”

It’s pretty rich for Alghabra to criticize Poilievre after announcing a frivolous initiative that will accomplish almost nothing. Other than making Canadians angrier at his government, that is.

A revamped airline passenger bill of rights with defined responsibilities related to delays and cancellations sounds nice on the surface. Yet, it’s not going to make Canada’s airline sector click their heels and change their tune overnight. They could still theoretically argue that circumstances were beyond their control on a case-by-case basis. They could still attempt to shift responsibility in different directions, leading to ill will between them and passengers. They could still try to delay financial compensation for various reasons. They could still cause further backlogs in our courts.

This is a band-aid solution at best. If the government really wants to get our domestic airline industry moving again, it needs to look at what it has refused to consider for years: a large-scale expansion of Canada’s open-skies policy.

Canada has had an open-skies agreement with the United States for over 25 years. The Blue Sky Policy, introduced in 2006 by former Conservative Prime Minister Stephen Harper, helped establish “Open-skies type agreements” with an additional 23 countries, including Iceland, Ireland, Jamaica, South Korea, and the United Kingdom. A new open-skies agreement was signed with India last November.

This is good, but it’s hardly enough. There are 195 countries around the world, and major trading blocs. With the obvious exception of rogue states and tyrannical regimes, Canada still has plenty of ways to support aviation liberalization and sign new open-skies agreements.

An open-skies policy would help establish a competitive marketplace for airline companies and consumers. As noted by Adam Thierer in an April 22, 1998, Heritage Foundation backgrounder, “Consumers, not regulators, are in the best position to make pro-competitive choices in this industry. Allowing Washington bureaucrats to reassume their positions as dictators of rates, routes, and quality would be worse than shortsighted: It would send the industry back to the regulatory Stone Age.”

The policy would help reduce the cost of airline ticket prices, and increase the demand for more discount ticket prices and last-minute seat sales for consumers. It would help liberalize the industry, create new jobs, and lead to new business ventures.

It would lead to greater airline deregulation and eliminate bloated regulatory bodies. While the Canadian government is quite protectionist when it comes to air travel (among other things), a free-market environment in the air has the potential to change all that. By liberalizing the industry and letting the free market rule, the need for government intervention and regulatory frameworks would eventually disappear.

Most importantly, it would help remove restrictive foreign ownership caps on “all things airplane.” This would increase competition from international airlines, create a more level playing field, and force Canadian airlines to rethink their business models. Far more so than an airline passenger bill of rights ever could.

If Alghabra really wants to be a politician who takes “action,” a large-scale expansion of Canada’s open-skies policy would go a long way to helping resolve our domestic airline crisis. Otherwise, he’s only paying lip service to those who truly want to fly a friendlier, rather than angrier, skies.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.